CHARLESTON, W.Va. — The U.S. Congress remains at a standstill about funding the federal government and preventing a breach of its borrowing limit as the legislative body approaches pressing deadlines and Democrats simultaneously work on achieving their policy goals.
Lawmakers face a Sept. 30 deadline to approve the necessary funding and avert a shutdown when the new fiscal year begins in October. The U.S. Treasury Department is expected to run out of available cash in mid-October, which would have a tremendous impact on the country.
Republicans and Democrats are at odds because of the Democrats’ legislative goals. Democratic lawmakers are trying to pass a sweeping $3.5 trillion package as part of President Joe Biden’s “build back better” agenda, which includes actions addressing health care, education and climate change. Democrats are not united on the proposal’s final cost and whether to pass the measure with the Senate’s bipartisan infrastructure bill. Biden has met with legislators this week in hopes of building consensus.
The federal government is expected to run out of funding on Sept. 30 if Congress does not act, resulting in federal employees being furloughed or not getting paid as well as certain services being stopped.
If Congress does not raise the debt ceiling by mid-October, there could be significant economic consequences. Mark Zandi and Bernard Yaros with Moody’s Analytics published an analysis Tuesday noting a recession is possible if Congress does not act. Zandi and Yaros warned the effects could include nearly 6 million jobs lost, a 9% unemployment rate and a reduction of $15 trillion in household wealth.
“Based on simulations of the Moody’s Analytics model of the U.S. economy, the downturn would be comparable to that suffered during the financial crisis,” they said.
Republicans and Democrats do not want the United States to default but remain unwavering in their positions. Forty-six Republican senators — including West Virginia’s Shelley Moore Capito — published a letter in August opposing an increase to the debt ceiling as Democrats continued pursuing their goals.
“We should not default on our debts under any circumstances. If Democrats threaten a default, it will only be because they refuse to vote for the debt ceiling increase necessitated by their own irresponsible spending,” they wrote.
Capito, speaking to reporters Thursday, said it is difficult to support increasing the debt limit as Democrats push their domestic policy proposal.
“I’m saying to them we need to have some negotiation here,” she said. “We cannot spend all of this money and then you ask us to help you raise the debt ceiling so then you can spend this money.”
Republicans have suggested Democrats increase the debt ceiling through reconciliation, an approach involving the Senate passing legislation without the typically necessary 60 votes.
“The Democrats have the majorities in the House, the Senate and the presidency. They have it within their caucus the ability to pass this, and I think what this is doing is highlighting to the American people how much money these new programs are going to cost and how much they are willing to spend,” Capito said.
The last government shutdown began in December 2018 and lasted 35 days; then-President Donald Trump and lawmakers could not reach a deal on immigration and border security. Around 800,000 federal workers were placed on furlough into the early weeks of 2019.
Capito said she believes Congress will be able to prevent a government shutdown.
“I think the more important thing is to do the continuing resolution that continues the government past Sept. 30,” she said.
As for increasing the debt ceiling, Capito said there needs to be room for compromise. Republicans and Democrats have supported raising the debt limit multiple times following negotiations.
“What we might say is what we said in 2010, I believe. We’ll help raise the debt ceiling, but we are not going to spend like this,” Capito stated.
“You got to pull the spending down, and there is no appetite for them to do this.”
Sen. Joe Manchin, D-W.Va., is among the lawmakers concerned about the $3.5 trillion proposal; he has cited increased spending amid the coronavirus pandemic and inflation as reasons for pausing the plan.
Manchin spokesperson Sam Runyon told MetroNews the senator supports raising the debt ceiling.
“The debt limit is a result of spending Congress has already authorized and defaulting on our bills in the middle of a pandemic would have devastating impacts on American workers and the economy,” Runyon said. “Senator Manchin will vote to raise the debt ceiling because Congress has a responsibility to pay our bills and prevent economic catastrophe for the American people.”
The House of Representatives on Tuesday approved a resolution to fund the federal government through Dec. 3 and suspend the debt ceiling through mid-December 2022. The bill would also appropriate funds for addressing natural disasters and assisting Afghan refugees.
The 220-211 vote was along party lines; Reps. David McKinley, Alex Mooney and Carol Miller joined Republican colleagues in opposing the measure.
“The Democrats are the ones trying to spend trillions of dollars, and they can raise their own debt ceiling,” Miller told MetroNews. “I’m not going to do it.”
The House also faces a Monday deadline to vote on the Senate’s $1 trillion infrastructure bill. The Senate passed the measure in August with a 69-30 vote, in which Manchin and Capito supported the bill.